10 Key Items to Consider in Online eCommerce for Nonprofits

nonprofit ecommerce transactions

eCommerce for a non-profit business is a unique piece of business operations.  While the traditional business is designed to sell products and produce profits, a non-profit organization processes transactions online to advance their mission.  Therefore, the order management systems used for non-profit businesses must be tailored to suit the needs of the business and the mission too. In this article, I discuss my thoughts on a few of the subtle nuances of eCommerce and items to be mindful of when selecting software for your nonprofit. 

eCommerce Software for Nonprofits 

For the purposes of this article, I refer to the buying or selling of anything online by your nonprofit as e-commerce. Just a little over a decade ago, having an online presence for a business or social organization was not a priority. In fact, it wasn’t very common at all. Larger organizations had a website and even offered some sort of online payment options, but many smaller organizations and nonprofits were still doing all the work face to face.

Suffice it to say, today it is extremely important to have an online presence for your nonprofit so that people can find you and get information about you, how they can join and how they can help support your efforts. Like a digital trading post, your constituents will be able to experience the same “add-to-cart” process they’ve become accustomed to when shopping online at other outlets.

To get the most out of your online ecommerce presence, you need to know what will make the most impact on your target audience. You’ll want to consider things like: Where is your audience looking for information? How tech savvy are your clients? What language are they using? Once you’ve created your audience profile, you can start planning your online strategy.

Also, before spending too much time on the search for an ecommerce solution, it’s important to think about the financial transactions themselves too. Financial transactions online for nonprofits is a bit unique. Orders processing for non-profit businesses range from paying dues, making donations, registering for events, training courses, and even ordering goodies from the organization like mugs, t-shirts, etc. For every order, the business must be able to account for the cost of the product, where the product came from and how that product impacts their tax liability.

In many cases, this is no different than a traditional for profit business. Below are 10 things to consider as you embark on finding an eCommerce partner at your nonprofit.

Branding 

When it comes to your website, remember that the design and layout are also very important to help visitors navigate to the right information. Make sure that your design is simple and your menu is easy to use from every page of the site.

When it comes to selling merchandise, you want something that stands out but also looks good so people will use it and raise awareness. It’s important to be mindful of how a vendor can brand their ecommerce transactional pages into your existing website without appearing disparate. The manner or openness of an eCommerce web page to be branded or not is unique to each provider.

SEO Importance in eCommerce 

Almost everything comes back to SEO! Your social media pages and website are all ranked by search engines, so the more information and images you have on them the better! Since most people check their social media accounts several times a day, they’re a great platform for you to share and promote events.

In terms of SEO, it’s important to consider the impact a disparate eCommerce solution may have on your overall SEO strategy. For example, if you have an event registration page managed by a third party provider, you may be losing “google juice”. So, when looking at ecommerce options, consider this in the mix too.

Mobility of Website Pages:

Your eCommerce pages need to be mobile like every other page you include on your website. Making your website mobile-friendly is also something to consider during the planning stages. With over 38% of smartphone owners buying through their devices, you’ll miss out on reaching a chunk of your target audience it you don’t do this. Responsive design is the must have today, but some vendors actually develop their pages for true mobile business commerce. Mobile eCommerce pages designed specifically for mobile devices adapt to the screen size too but specifically eliminates items which provide an even more friendly online experience too.

Compliance & Segregation of Funds:

Your transactions online must be able to be segregated. In other words, if a PAC contribution comes in along with a dues payment in one order, your system must be able to account for that in the back end. Or, you will have a mess to deal with. Further, PCI compliance is a big deal too. Obviously, credit cards should not be stored in your database.

Taxes In Nonprofit eCommerce:

Nonprofit is basically a business model. It indicates that an organization puts any income it earns back into its budget. However, all organizations must be mindful of taxes. But, because of the guidelines the IRS sets for non-profit and tax-exempt businesses, every order must be tracked for tax purposes.

The payments for donations may likely be considered deductible for the purchaser so sending out quick receipts from the membership system (or donor database software) is very important. Further, if goods are given away as with some nonprofits, the items that are given away must be accounted for on the non-profit’s final tax return. If you sell physical goods, some systems may have a national sales tax database for states you are doing business in.

Inventory Management:

If you sell books, training manuals, or even gift items, you need to consider managing your stock levels. Having large volumes of stock left over can be very costly, particularly if you choose items that simply aren’t popular. Selling branded merchandise is also great for increasing your offline presence- your clients are walking billboards! But, if they have a bad experience online (wrong size, wrong color, long delays), it can backfire.

Shipping Costs:

Again, if you have to ship things out. Any system which you obtain, you may consider the impact of having to manage the costs and the actual process of sending goods out to your constituents. Some systems today have integration with major shipping carriers such as UPS and USPS too. Depending on your volume, it may be helpful to place importance on this feature.

Fees for eCommerce Software:

Credit Card fees matter. Be mindful of the fees associated with an  e Commerce software vendor. Each software provider is different here. Fees can be plans which include a monthly subscription fee and a fee based on revenue managed in a system. In addition, a provider may charge either a payment fee to use an online merchant account, or a connection fee to connect your own provider. It’s critical to check every little fee when you sign up with a software provider or merchant account provider.

Cancellations of Orders:

How will you handle cancellations for orders purchased online with an eCommerce system? If a participant cancels their event registration, how will the revenue fee be calculated and credited your constituents. If you are using a commercial off the shelf software database web platform for various online eCommerce activities, be sure to check how the refund process works within the confines of the solution.

Contract Terms:

Some e Commerce software providers require a longer term contract while others do not. It’s important to know your eCommerce providers (Association Membership Software, Donor Management, CRM software ) terms in case you decide that it isn’t the best eCommerce platform for your business. Be careful to check for hidden fees too. The lower costs options usually make their money on them.

There’s no reason why eCommerce shouldn’t work for nonprofits today. Not only is it a great way to generate revenue for your nonprofit, it’s also a useful tool to build your online presence and get your nonprofit out there. Each item, class or membership you sell through your online store contributes to your SEO and helps you get found online.

So, eCommerce is a bit different than the for profit market. Therefore, be mindful as you embark on the journey to find and administer your e-commerce solution. If you would like to discuss online membership management solutions or general e-Commerce pages for your nonprofit, give us a call.

Until next time, keep SmartThoughts in mind.

Not for Profit CRM Fundraising Software Guide

 

Trends You Need to Know About In Accounting in Nonprofits

Trends in Accounting Software for Nonprofits

For many nonprofit development officers, the EOY push to bring in more donations is always top of mind right now. But, while many non-profit executives should and are focused on bringing in a steady from of donations, an equal amount of time making sure that finances and accounting are in order is vital for all sizes of non-profit organizations too right now. In this article, I share 5 key takeaways I derived from a recent report on accounting trends for nonprofits which I believe you will find interesting and worth a read.

Accounting for Nonprofits 

As much as we all need to “attract” new members and donors, it’s equally the responsibility of nonprofit executives to be good stewards too with the donations they receive. Without question, your  top donors want to ensure their funds are well-used and properly managed. Abila, a software provider focused on non-profits, recently released results from their survey, Finance and Accounting in Nonprofits, which I believe does a good job of shedding some light on information about this topic.

Just to put it into perspective and the frame the study, the findings came from professionals which work at a broad range of organizations that take in between $1 million and $50 million in annual revenue. The sample of data came from 350 finance and accounting staffers at various nonprofits.

Below are my most notable thoughts on the trends in this report.

The Generation Gap in Accounting Practices

One of the study’s focal points was on how financial staffers from different generations viewed their responsibilities. Interestingly, there was not a lot of difference in responses between Millennials, Gen Xers and Baby Boomers. While the different generations may be in different career stages, most of them see similar challenges in their day-to-day work.

When I visit with executives seeking new software tools and technology, I do inquire during my assessments about the demographics of the organization’s constituents. And, suffice it to say there are a diverse set of age ranges with regards to staff in most nonprofits. In many instances, the Millennials seem to have a different opinion than Baby Boomers on what’s important and their expectations on how best to address it with technology. Therefore, these finding for accounting staffers was actually encouraging. Everyone seems to be on the same page!

Doing More with Less 

Non-profits as a whole are moving to have fewer finance staffers, so those that are in these positions have a more varied range of duties and more impact on day-to-day operations. Finance and accounting employees are spending their time running reports and taking care of immediate tasks rather than focusing on strategy and helping to move their organizations forward.

This is not much of a surprise to me. And, coincides with most everyone’s perceptions reading this article, but it made me contemplate how technology will become increasingly important in order to move forward for even the smallest of organizations.

More Integrated Departments

It’s great to have more input into other departments, so that everyone is more aware, but finance staffers are often asked to take on operations, human resources and other tasks that may fit outside the accounting umbrella. This also leads to one of the biggest challenges that the study uncovered: Daily interruptions from other departments. The exception seemed to be with fundraising, as finance professionals reported the least interaction with their cohorts in that department.

After reviewing this bit of information, I could not avoid thinking about the ongoing discussions in the “for profit” world about alignment among various departments. For years, many CRM (Customer Relationship Management Software) providers have touted the need for the right hand knowing what the left hand was doing. And, many cited integration with accounting as a key area of disconnect. These findings support the importance of having integrated data from all departments is as important in the nonprofit world too.

Moving to the Cloud Accounting Software 

Software solutions are more frequently cloud-based, which can be more efficient but also presents challenges in adopting new practices and ensuring security of information. Finance and accounting professionals often have responsibilities in implementing the financial side of this cloud-based software and keeping data secure.

Once again, this isn’t a nonprofit trend rather a movement by all organizations across the board and in all industries. More an more organizations are opting to have their data and their software managed off site and choosing software which is subscription based (rented) rather than owned.

Growing the Organization

Identifying new sources of funding and staying sustainable are key challenges for non-profit finance staffers. Nearly one-third of respondents said they expected growth to stay flat for at least the next three years. Abila’s report cited this understanding of how professional finance and accounting staffers work as being key toward ensuring that funds are dispersed according to the organization’s needs and donors’ wishes. Understanding the challenges they face can show trends both in finance and in the overall management of non-profit organizations which I felt was interesting.

Without a doubt, it’s important to be transparent and good stewards with the donations and contributions which come into a nonprofit. And, it’s apparent that the entire team can benefit from an integrated process & solution which may help everyone keep better tabs on their mutual efforts.

In short, I enjoyed this report and hope this frames the topic with some clarity. What do you think?

For your copy of the full report, please go here.

And, if you would like help identifying ways to increase the productivity of your non-profit organization with technology, contact us.

Until next time, keep SmartThoughts in mind.

Not for Profit CRM Guide for Software Review Process

Top 5 Signs Your Business has reached the Limits of Quickbooks

We outlined the top 5 items to consider in Financial Software for NPO's

QuickBooks is the world’s most popular small business accounting system with a reported 3.5 million users. And, many of our association nonprofit clients use it today. In this article, we would like to highlight the top 5 reasons it may be necessary to remove the ball and chain and explore a new software option to handle the financial and accounting aspects of your business.

1st, there is no denying the success of this product. For the money, QuickBooks provides a good value and a reasonable assortment of features to meet the needs of small and entry-level businesses.

While QuickBooks offers a good entry-level solution, it has limitations that prevent the product from meeting the needs of many associations and nonprofits – especially growing associations.

The Top 5 Signs You’ve reached the Limits of Quickbooks

So, without further adieu, here are the Top 5 Signs:

  1. It’s Too Hard to Find Out What’s Really Happening Across Your Business Right Now
  2. Too much Time Re-Entering and Reconciling Data across Systems
  3. Your’re Losing Dues, Donor, or Nondues Revenue because you can’t Get Information Where it’s needed Fast Enough
  4. Your’re Doing More of Your Accounting Outside of Quickbooks Than in IT
  5. You Spend Too Much Time Worrying About Technology Instead of Focusing on Business Intelligence

How do you feel? When is the right time to make a move? Give us a call and we can help answer those questions for you.